Balearic economy may well have turned the corner

THE Balearic economy could possibly have turned the corner and be on “the road to recovery” and could close 2003 with a growth of between 0 and 0.5 percent, according to the Confederation of Balearic Businesses. The organisation has reported that during the first six months of the year, the variation of Gross Product in the Balearics was situated at -0.1 percent. “We have the sensation that the economy isn't going to sink any further. Hope has set in that the growth rate of the Balearic Gross Product over the coming months will be positive”, commented the organization's President, Josep Oliver. He was speaking during the presentation of a joint economic report made by the Economic department of the Confederation of Balearic Businesses (CAEB). The findings of the study analyze the economic situation of the Islands during the first six months of the year. The fall of 0.1 percent during this period suggests that the trend of spiralling descent, reflected in the fact that in 2002 the Balearic Gross Product (PIB) stood at -0.6 percent, may be on the upturn. The Economic department's director, Vicenç Tur, based the optimistic forecast of the Confederation for the second six month period of 2003 on the fact that the second part of the year may witness a boost to the Gross Balearic Product. The forecasts for the current high tourist season are reading favourably. In addition, Josep Oliver believed that the change of Government following last May's elections has been a positive influence. The new team in power in the Balearics are sending out welcoming signals to tourist operators and their respective markets resulting in a fresh surge of visitors to the Islands. The business sector of the Islands also feels a “breath of fresh air” and is taking heart from the new régime. “We can see plans on the horizon” ventured Oliver, alluding to the official request made by the Balearic government to central Spanish Parliament for investments to the tune of 1'500 million euros for the Islands. According to Jaume Matas, the Balearic President and his team, this could “reactivate” the economy and be the cornerstone of its growth or decline. “There are more positive aspects than negative ones”, he said. With regard to the first six months of the year, Oliver signalled that the Confederation had foreseen a fall in the Gross Balearic Product of 0.1 percent, a situation that could be described as “bringing the rate of descent under control”. Negative growth rates had resulted from poor performance in the tourist sector and the onset of demoralization in the construction sector. Regarding Construction, the sector in which Gross Product fell by 0.9 percent, the study takes into account that the industry had begun to “suffer the effects of temporary building restrictions and reduction of economic growth on a global scale”. Up until now, construction companies had managed to cope with lack of new orders by having work to finish off on sluggish projects begun in previous years. The Confederation's report now reveals, however, that the number of building projects approved in the College of Architects has gone down by 51 percent, sales of cement have fallen by 13 percent, unemployment claims by those previously working in Construction have grown some 38.5 percent and numbers of contracts signed by employer and employee have sunk by 5 percent.